We are pleased to share this Q&A featuring Dr. Reddy, Prime Healthcare, and the Managing Director of the Advisory Board. The Advisory Board is a prestigious healthcare advisory organization with a global presence, spanning three continents, and its Daily Briefing is distributed to more than 200,000 healthcare leaders throughout the United States and internationally. Please feel free to share Dr. Reddy’s feature article with others in your organization and community.
You see a failing hospital. CEO Prem Reddy sees an opportunity.
Lessons from the C-Suite: Prem Reddy, Chair, President, and CEO of Prime Healthcare
Eric Larsen, Managing Partner
Welcome to the “Lessons from the C-suite” series, featuring Managing Partner Eric Larsen’s conversations with the most influential leaders in health care.
In this edition, Prem Reddy, chair, president, and CEO of Prime Healthcare, shares with Eric his system’s approach to working with health plans, how he gained a reputation as a turnaround expert, and why leadership is in his DNA.
Q: Dr. Reddy, you have 43 hospitals in 14 states and 43,000 employees. Prime is the fastest-growing healthcare system in the country, as noted by Modern Healthcare last year, and the fifth-largest for-profit system by hospital count. You’ve taken bets on acquiring distressed and bankrupt hospitals that others have passed over. How have you made these acquisitions work?
Prem Reddy: My experience with Desert Valley, the hospital I built, gave me a level of confidence that I could turn around a failing hospital. Desert Valley was sold, along with my physician practice management (PPM) company, to PhyCor. PhyCor declared bankruptcy soon after that. At the time, I was very disappointed with myself. This was my only experience building a hospital from the ground up, and I felt that I had failed.
In December 2000, the doctors at Desert Valley called to ask me to come back. I pooled all my money and borrowed more to repurchase it. From 2001 to 2003, I worked as a physician, medical director, and cardiologist. It was a mess at that time, but Desert Valley eventually did extremely well.
Later, a group of doctors 30 miles away purchased a hospital when it was in distress, but it ultimately failed and went into bankruptcy. They asked me to buy the hospital through bankruptcy and turn it around. And then a third hospital in bankruptcy came to me. That’s how I became a turnaround expert for hospitals.
Now, we get at least a few calls a week. We can’t help everyone, but concentrate on those we can help.